Correlation Between IShares 1 and SPDR Bloomberg

Can any of the company-specific risk be diversified away by investing in both IShares 1 and SPDR Bloomberg at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining IShares 1 and SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares 1 3 Year and SPDR Bloomberg International, you can compare the effects of market volatilities on IShares 1 and SPDR Bloomberg and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IShares 1 with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares 1 and SPDR Bloomberg.

Diversification Opportunities for IShares 1 and SPDR Bloomberg

0.98

Correlation Coefficient

IShares 1  SPDR Bloomberg

Almost no diversification

The 3 months correlation between IShares and SPDR is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares 1 3 Year and SPDR Bloomberg International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Inter and IShares 1 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on iShares 1 3 Year are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Inter has no effect on the direction of IShares 1 i.e., IShares 1 and SPDR Bloomberg go up and down completely randomly.

Pair Corralation between IShares 1 and SPDR Bloomberg

Given the investment horizon of 90 days iShares 1 3 Year is expected to under-perform the SPDR Bloomberg. But the etf apears to be less risky and, when comparing its historical volatility, iShares 1 3 Year is 1.2 times less risky than SPDR Bloomberg. The etf trades about -0.01 of its potential returns per unit of risk. The SPDR Bloomberg International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,650  in SPDR Bloomberg International on September 20, 2024 and sell it today you would earn a total of  190.00  from holding SPDR Bloomberg International or generate 7.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares 1 3 Year  vs.  SPDR Bloomberg International

iShares 1 3

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares 1 3 Year has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Etf's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

SPDR Bloomberg Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR Bloomberg International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with IShares 1 and SPDR Bloomberg

The main advantage of trading using opposite IShares 1 and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 1 position performs unexpectedly, SPDR Bloomberg can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SPDR Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.

The idea behind iShares 1 3 Year and SPDR Bloomberg International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.